You want to buy a $30,000 car. You can make a 10% down payment, and will finance the balance with a 3% interest rate for 60 months (5 years). What will your monthly payments be?

Q: You're thinking about borrowing a $2000 personal loan. The interest rate on the loan is 10% with…

A: A study that proves that the future worth of the money is lower than its current value due to…

Q: a) How much is the loan amount going to be? b) What will your monthly payments be? c) How much…

A: Loan payments can be paid off in periodic payments. To understand the periodic payments the loan…

Q: I want to buy a $195,000 house and plan to pay 20% as a down payment t and take a 3.8% APR loan for…

A: To find the monthly payment, we will use 'PMT' function in excel. As down payment is 20% ($39,000),…

Q: You want to borrow $25,000 to buy a new car. Your annual interest rate is 6.2% over 4 years with…

A: Given: Loan borrowed = $25,000 Interest rate = 6.2% years = 4

Q: You are ready to buy a house, and you have $30,000 for a down payment and closing costs. Closing…

A: Mortgage loans are paid by equal and fixed monthly payment that carry the payment of interest and…

Q: what is the largest down payment you can make at the end of three years (immediately after the last…

A: Value at the end of saving period comprises of monthly saving and interest on those savings.…

Q: You plan on borrowing in order to buy a condo. You want to borrow for 30 years and make monthly…

A: Loan amount refers to an amount that is borrowed by the borrower from the lender at a specified rate…

Q: In order to be able to buy the new machine, you take a loan of 2 million from the bank, which you…

A: Amortized loan: An amortized loan is a case of the present value of an ordinary annuity.The PV of an…

Q: You want to buy a $18,000 car. You can make a 10% down payment, and will finance the balance with a…

A: Monthly installment is that amount which is paid every month it's includes the interest and…

Q: You want to buy a $255,000 home. You plan to pay 5% as a down payment, and take out a 30 year loan…

A: Amount of home = $255,000 Down payment = 5%  The time duration of the loan = 30 years

Q: You want to buy a $260,000 home. You plan to pay 5% as a down payment, and take out a 30 year loan…

A: a) Loan Amount = Total price of house - Down payment  = 260,000 - (260,000 * 5%) = 260,000 - 13,000…

Q: You planned to borrow $575,000 for a house at 2.9% interest for 30 years.  You find a house that you…

A: A loan is a sum of money obtained from outside sources such as banks and repaid over time in fixed…

Q: You've been offered a loan of $20000, which you will have to repay in 5 equal annual payments of…

A: Present Value = pv = $20,000Number of Payment = n = 5Payment = p = $6000

Q: You've been offered a loan of $10000, which you will have to repay in 10 equal annual payments of…

A: We take loans to buy large ticket items like a car or a house or to fund high expenses like college…

Q: You want to buy a new car. You can afford payments of $250 per month and can borrow the money at an…

A: The term mortgage refers to a type of loan that is for the long term, and it usually has the asset…

Q: You want to buy a home in 5 years, and you think at that time you will be able to afford to buy a…

A: Monthly payment refers to an amount that is being paid at every month for the repayment of the…

Q: You want to buy a $23,000 car. You can make a 10% down payment, and will finance the balance with a…

A: A loan refers to a contract between a borrower and a lender where a sum is exchanged on the promise…

Q: You want to buy a $232,000 home. You plan to pay 10% as a down payment, and take out a 30 year loan…

A: Here, Particulars Values Purchase price  $ 232,000.00 Down payment  10.00% Time period (in…

Q: You want to buy a car. The loan amount will be $29,000. The company is offering a 4% interest rate…

A: Annuity is a series of equal periodic payments for a specified period.With periodic rate (r), period…

Q: You want to buy a car for $25000 that has to be paid in 5 years. If the car dealer agrees to finance…

A: Working note:

Q: You want to buy a $27,000 car. The company is offering a 4% interest rate for 48 months (4 years).…

A: EMI is defined as an amount payable for each and every month to the bank or the financial…

Q: You want to buy a car. The loan amount will be $25,000. The company is offering a 4% interest rate…

A: When the borrower borrows a loan from the lender, he has to pay a rate of interest on the borrowed…

Q: You are planning to buy a new car/truck (of your dreams) 7 years’ time at a cost of $134,956. How…

A: Here, The monthly rate of interest is 'r' Number of months is 'n'

Q: You took out a loan to buy a new car. The monthly interest rate on the loan is 1%. You have to pay…

A: An Annuity Due is a stream of regular periodic payments made at a beginning of period for a…

Q: You want to buy a $15,000 car. The company offering a 3% interest rate for 60 months (5 years). What…

A: To calculate the monthly payment we will use the below formula   Monthly payment = PV/[1-(1+r)-n]/r…

Q: You want to buy a $20,000 car. The company is offering a 2% interest rate for 60 months (5 years).…

A: Variables in the question:PV=Loan amount=$20000Rate=2%N=5 years

Q: You want to buy a $26,000 car. The company is offering a 2% interest rate for 36 months (3 years).…

A: Monthly payments are the periodic amounts that a loan borrower has to make on a regular basis in…

Q: You want to buy a $251,000 home. You plan to pay 5% as a down payment and take out a 30-year loan…

A: A mortgage refers to a loan against the purchase of a house. Mortgage repayment requires the…

Q: Suppose you have a student loan of $25,000 with an APR of 12% for 20 years. Complete parts (a)…

A: We need to use loan amortisation formula to calculate monthly payment of loan. The formula is PMT…

Q: You want to buy a $29,000 car. The company is offering a 2% interest rate for 48 months (4 years).…

A: The monthly payment for an amortized loan can be determined using either a formula or the Excel…

Q: Suppose that you have good credit and can get a 30-year mortage for $100,000 at 5%. What is your…

A: A mortgage is a loan made usually for a property in which the collateral is the property itself.

Q: How much would you have if the account paid 4.25%?

A: We can determine the FV using the FV of annuity due formula as below:In the formula above PMT =…

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.